Bills Digest 99 1995-96
Airports (Transitional) Bill 1996
WARNING:
This Digest is prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments.
This Digest was available from 14 June 1996
CONTENTS
Airports (Transitional) Bill 1996
Date Introduced: 23 May 1996
House: House of Representatives
Portfolio: Finance
Commencement: Royal Assent
The amendments contained in the Bill are consequential on the proposed
lease of Commonwealth airports.
Refer to the Digest for the Airports Bill 1996.
'Sale time' for a Commonwealth owned company is defined as the particular
time, in the opinion of the Minister for Finance, on which a majority
of the voting shares in the company are acquired by a person or persons
other than the Commonwealth or a nominee of the Commonwealth. The Minister
of Finance must then declare the time to be sale time by a notice in the
Gazette (clause 6).
Sydney West Airport is defined as an airport even if it is still a development
site (clause 5).
Part 2 - Transfers from the Federal Airport Corporation to the Commonwealth
Airport land and certain FAC assets and liabilities are to be transferred
from the FAC to the Commonwealth. The mechanism for the transfer of land
is statutory vesting and clause 11 provides that specified land
in which the FAC has any right, title or interest will vest in the Commonwealth
upon the publication in the Gazette by the Minister for Finance of a notice
to that effect, without any conveyance, transfer or assignment.
Other FAC assets can be vested in the Commonwealth by the same procedure
(clause 12), as can the liabilities of the FAC, other than contractual
liabilities. The transfer of contractual rights and obligations is dealt
with in clause 13, which provides that in relation to contracts,
other than contracts of employment, the Minister for Finance may declare
that the rights and obligations entered into by the FAC become rights
and obligations applying to the Commonwealth.
Clause 14 provides that rights and obligations of the FAC, other
than contract rights and obligations, may be transferred to the Commonwealth
by the Minister for Finance.
Once the FAC's interest in airport land vests in the Commonwealth, the
airport ceases to be a Federal airport for the purposes of the FAC Act
(clause 15).
Part 3 - Original grants of airport leases to companies
This Part applies to Kingsford-Smith, Sydney West, Tullamarine, Brisbane,
Perth and other airports specified in the regulations where the site is
owned by the Commonwealth (clause 20).
Clauses 21 and 22 permit the Commonwealth to grant an airport
lease to a company if all of the company shares are beneficially owned
by the Commonwealth (clause 21) or if none of the company shares
are beneficially owned by the Commonwealth (clause 22). The Commonwealth
cannot grant an airport lease to a company if some of the company shares
are beneficially owned by the Commonwealth.
Where land or other assets has been transferred to the Commonwealth
from the FAC under clauses 11 or 12, the Minister for Finance may declare
that those assets vest in the relevant company granted a lease under clauses
21 or 22 (clause 23).
Similarly, clause 24 provides for any contractual rights or obligations
transferred to the Commonwealth under clause 13 to be transferred by the
Minister for Finance to a company granted an airport lease, and clause
25 provides that any relevant liabilities undertaken by the Commonwealth
under clause 14 may be transferred to the company granted an airport lease.
Under clause 26, an airport lease granted under clause 21 or
22 is subject to all existing leases in relation to the land and subject
to all other existing interests in the land.
Part 4 - Transfer of the FAC's assets or contracts to airport - lessee
companies and Part 5 - Transfer of the FAC's liabilities to airport-lessee
companies
Those assets and contractual rights and obligations of the FAC which
are not vested in the Commonwealth under the above provisions may be transferred
from the FAC to airport-lessee companies pursuant to clauses 30 to
33.
Part 6 - Treatment of sale of shares in an airport-lessee company
owned by the Commonwealth
Where an airport lease is granted to a Commonwealth owned company under
clause 21, Part 6 will apply. The measures contained in Part 6 are largely
for accounting purposes. Clause 36 provides that the Minister for
Finance may pay an amount, determined by the Minister, to the FAC between
the time when an airport is transferred under clause 21 and the sale of
the shares in the company to which it was transferred takes place. After
the sale of the shares, the Commonwealth must pay to the FAC an amount
determined by the Minister (NB: while the 1995 Bill provided for an amount
equal to the consideration received by the Commonwealth to be paid to
FAC, this Bill allows that amount to be determined by the Minister for
Finance). After the sale of all of the shares held in a company granted
an airport lease under clause 21, clause 38 allows the Minister
for Finance to determine if extra capital is payable to FAC.
Clause 39 contains a standing appropriation without a statutory
cap.
Part 7 - Treatment of consideration payable by an airport-lessee
company that is not owned by the Commonwealth
The provisions in Part 7 mirror the provisions in Part 6, but Part 7
applies to an airport-lessee company that is not owned by the Commonwealth.
Again, the Part contains a standing appropriation without a statutory
cap (clause 44).
Part 8 - Special tax rules
Some transactions are exempt from stamp duty and other taxes. By clause
46, the following will be exempt:
- the grant of an airport lease under clause 21;
- an agreement relating to the transfer of a lease under clause 21;
- the transfer of an asset to a company granted a lease under clause
21;
- the grant of a lease of an asset under clause 23 to a company granted
an airport lease under clause 22; or
- an agreement relating to the grant of a lease of an asset under clause
23 to a company granted an airport lease under clause 22.
If the Commonwealth grants an airport lease under clause 22 to a company
that is not owned by the Commonwealth, the transactions, agreements etc.,
other than those executed before transfer, are not exempt from stamp duty
and other taxes (clause 47).
Clauses 49 to 51 relate to depreciation. Clause 49 will
allow a sub-lessee to continue to depreciate property after the airport
is leased. Clause 50 allows a company to which assets were transferred
under clause 23, to claim depreciation on those assets as if the company
had acquired the property from the FAC and not the Commonwealth. The basic
effect of the provisions relating to depreciation is to set a depreciated
value for income tax purposes that will be the same as if the airport
lessee held and depreciated the asset.
Clause 55 provides that the Income Tax Assessment Act 1936
relating to depreciation and Part IIIA of that Act which deals with Capital
Gains Tax, can be modified by regulations in relation to an airport lease
transferred to a Commonwealth owned company and the assets transferred
or leased to the company under clauses 23, 24, 30 or 31.
Part 9 - Transfer of Staff from the FAC to Airport Lessee Companies
When an airport lease is granted to a company, those employees of the
FAC that are specified by notice in the Gazette, cease to be employed
by the FAC and are engaged as employees of the company (clause 58).
The terms and conditions of employees are safeguarded (clause 59)
but can later be varied by law, award, determination or agreement (clause
60).
Part 10 - FAC's debts
Division 2 applies to loans to the FAC by the Commonwealth and Division
3 applies to non Commonwealth loans to the FAC. In Division 2, clause
68, the Treasurer may declare the principal and interest of a loan
due and payable at a specified time. If an amount becomes due and payable,
the Minister for Finance can determine that the Commonwealth is liable
to pay the FAC an amount equal to that amount.
Clause 70 contains a standing appropriation power without statutory
cap.
In relation to non Commonwealth loans, the Treasurer can declare, by
notice in the Gazette, that a FAC obligation becomes a Commonwealth obligation,
and authorise the payment of money by the Commonwealth to discharge the
loan (clause 73). Alternatively, the Treasurer may enter into an
agreement with the FAC for the Commonwealth to take over FACs obligations
under a loan and authorise payment to discharge the obligation (clause
74). Finally, the Minister for Finance may determine that there is
payable to FAC an amount that the FAC is to use to discharge a loan obligation
(clause 77).
Clause 78 contains a standing appropriation power without statutory
cap.
Part 12 makes it clear that an airport lessee company is not
a Commonwealth agency, public authority, or an instrumentality of the
Crown.
Chris Field Ph. 06 277 2439
13 June 1996
Bills Digest Service
Parliamentary Research Service
This Digest does not have any official legal status. Other sources should
be consulted to determine whether the Bill has been enacted and, if so,
whether the subsequent Act reflects further amendments.
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ISSN 1323-9032
© Commonwealth of Australia 1996
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Published by the Department of the Parliamentary Library, 1996.
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Last updated: 19 June 1996
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